HR KPIs: top 26 key indicators for human resources

The human resources (HR) departments play a critical role in determining an organization’s ultimate success. Human Resources Key Performance Indicators (KPIs) have evolved as essential tools for upper management, chief people officers, managing directors, and country managers to optimize their staff and achieve strategic goals. These KPIs provide HR leaders with data-driven insights, helping them improve recruiting, talent development, employee engagement, and productivity.

Measuring HR Performance: why it is important

Key performance indicator metrics are essential for businesses because they allow companies to measure HR performance and ensure that HR activities align with the company’s broader business plan. Measuring the HR department’s performance helps organizations manage their most valuable asset—their employees—most efficiently.

When organizations use human resource KPI measurements, they gain insight into the HR department’s strengths and limitations, as well as opportunities for improvement. Consequently, this helps optimize HR processes, enhance employee engagement and retention, and ultimately contributes to the company’s overall success.

Tracking HR performance over time is also crucial for making informed decisions. Regularly monitoring KPI indicators helps HR managers spot patterns and trends that reveal the efficacy of current strategies. For example, if a company has a high turnover rate, HR KPIs can help managers examine the data to determine the root cause and implement effective solutions.

HR KPIs: metrics to measure success

Human resources key performance indicators are more than just numbers; they serve as a barometer of an organization’s most valuable asset. They offer a bird’s-eye view of HR operations and provide insights that you can use to make strategic decisions. Therefore, HR indicators are essential for business intelligence (BI) when coordinating employee efforts with strategic goals.

Recruitment and talent acquisition KPIs

Time to fill

Time to Fill is a metric that assesses how long it typically takes to fill a position. This timeline covers the entire process, from advertising a position to the day a new employee begins work. According to Glassdoor, the average time to fill a job vacancy in the United States is 23.8 days. This key performance indicator is critical for maintaining an effective recruitment procedure. Furthermore, filling critical positions quickly allows teams to work at full capacity and prevents top talent from leaving for the competition.

Cost per hire

The Cost Per Hire metric estimates the time and money a company spends to find and hire a new employee. The Society for Human Resource Management (SHRM) reports that the average cost per hire is approximately $4,000. Organizations use this data to determine how much to spend on recruitment and which techniques to prioritize. Generally, a lower cost per hire indicates more efficient recruitment efforts.

Quality of hire

The Quality of Hire metric assesses how valuable new hires become over time. Effectively, it measures a new hire’s worth to the company. Hiring the best possible candidates can lead to a rise in productivity and efficiency. Furthermore, hiring high-caliber people increases retention rates, saves money, and improves workplace morale.

Source of hire

Source of Hire identifies the most effective channels for finding new employees. This metric sheds light on the most productive recruitment channels. By gaining a deeper insight into the best candidate pipelines, HR professionals can improve resource allocation and optimize recruitment outcomes.

Employee development KPIs

Training and development investment

This KPI quantifies the percentage of a company’s budget earmarked for employee education, training, and professional growth. Maintaining a competent and educated staff is essential for a company’s development and long-term success. Investing in training and education can directly increase productivity, creativity, and overall success in the workplace.

Employee learning and growth

The employee learning and growth KPI evaluates professional growth, such as acquiring new abilities and completing significant career milestones. When their development is valued and monitored, employees feel more invested and content. Importantly, employees who feel invested in their work are less likely to leave the company.

Employee performance rating

The employee performance rating system quantitatively measures performance against established benchmarks. This process commonly involves evaluations and assessments. Accurate performance evaluations allow businesses to reward excellent work and pinpoint problem areas. This information is invaluable for HR planning and employee growth initiatives.

Employee engagement KPIs

Employee engagement score

The employee engagement score assesses workers’ investment in their employment and the company. Gallup’s “State of the Global Workplace” report states that only 15% of employees worldwide are engaged in their jobs. An engaged workforce increases output, innovation, and loyalty. High engagement also means employees are more likely to stick around and use fewer sick days.

Employee net promoter score (eNPS)

Similar to how the Net Promoter Score evaluates customer loyalty, eNPS assesses workers’ likelihood to promote their workplace to others. A high eNPS score signals an encouraging and productive workplace environment. Therefore, workers enthusiastic about recommending their company to others are more likely to attract and retain talented newcomers.

Voluntary turnover rate

The voluntary turnover rate is the percentage of workers who choose to leave the company, as opposed to being laid off or terminated. Typically, the voluntary turnover rate is lower when employees feel happy in their jobs. A low rate means the company spends less money on hiring new people, retains more knowledge, and maintains better morale.

Workforce productivity KPIs

Revenue per employee

Revenue per employee analyzes a company’s profitability on a per-worker basis. According to Statista, the revenue per employee for technology giant Apple Inc. was approximately $2.4 million in 2022. This metric helps gauge the effectiveness and efficiency of the workforce. Specifically, a higher revenue per employee indicates the efficient use of human capital, which translates into higher profits.

Absenteeism rate

The Absenteeism Rate measures employees’ unplanned absences from work as a proportion of total workdays. Reducing absenteeism ensures that business operations can continue normally and efficiently. Consequently, reduced absenteeism helps maintain high productivity and keeps the office running smoothly.

Overtime percentage

The Overtime Percentage calculates the proportion of overtime hours worked compared to the total number of normal work hours. Managing overtime is essential for keeping costs down, maintaining worker satisfaction, and preventing burnout. This key performance indicator helps prevent workers from taking on too much, maximizing productivity while avoiding burnout.

Diversity and inclusion KPIs

Diversity index

The Diversity Index calculates the representation of women and people from different racial and ethnic backgrounds within an organization. Teams with a diverse mix of backgrounds and experiences are more likely to generate novel solutions and innovative ideas. Therefore, actively encouraging diversity creates an inclusive and stimulating workplace.

Inclusion rating

The Inclusion Rating measures how employees feel treated fairly, accepted, and valued at work. Creating a sense of community and acceptance in the workplace has been linked to greater commitment, innovation, and loyalty among staff members. When workers feel a strong sense of belonging, they are more motivated to positively impact the company’s bottom line.

Compliance and legal KPIs

HR compliance index

The HR Compliance Index evaluates how well a company follows human resources and employment legislation. Ensuring compliance is crucial for reducing legal risks and avoiding expensive legal complications. Moreover, this metric helps maintain the high level of trust employees and external stakeholders have in the company.

Employee relations cases

The Employee Relations Cases metric records the number of complaints, disagreements, and investigations in the workplace. Effective management and prevention of employee relations situations are necessary to achieve harmony in the workplace. This KPI helps keep operations running smoothly and ensures disagreements are resolved quickly.

Compensation and benefits KPIs

Total compensation ratio

The Total Compensation Ratio evaluates employee pay in relation to the business’s overall success. Tying compensation to performance and the business’s health improves fairness and transparency. Ultimately, it ensures that workers receive appropriate pay for the work they contribute.

Benefits satisfaction

Benefits Satisfaction gauges how content workers feel with their compensation and benefits packages. If workers value the perks they receive, they are more inclined to stay with the company. Therefore, this KPI plays a significant role in both employee happiness and retention.

HR technology KPIs

HR technology adoption rate

The HR Technology Adoption Rate monitors how frequently employees use and adopt HR software. Utilizing technology in human resources streamlines operations and increases productivity. This efficiency frees up HR departments to concentrate on more important, strategic endeavors.

Time spent on administrative tasks

The Time Spent on Administrative Tasks metric estimates the time human resources staff dedicate to routine, non-strategic tasks. When HR professionals spend less time on administrative work, they can devote more effort to strategic HR initiatives and key activities, such as talent management and development.

Workplace safety KPIs

Lost-time injury rate

Researchers developed the Lost-Time Injury Rate metric to determine how safe an organization’s workplace is. Maintaining a risk-free workplace protects workers and simultaneously cuts down on injury-related expenses.

Workplace satisfaction

Workplace Satisfaction measures employees’ overall contentment with their work setting, including the culture and facilities. Employees who feel happy in their jobs are more invested in their work, produce better results, and create a more pleasant environment for everyone.

Succession planning KPIs

Leadership pipeline

Organizations use the Leadership Pipeline to assess potential future leaders. Having a solid leadership pipeline helps a company save money on costly external recruitment efforts while fostering continuity within the organization.

Succession fill rate

The Succession Fill Rate measures how many top positions an organization filled from internal candidates. Effective succession planning and a high succession fill rate demonstrate the value of investing in talent development for a company’s long-term success.

HR budget management KPIs

HR budget variance

The HR Budget Variance analyzes actual spending in relation to financial forecasts. Controlling spending—both over and under projections—helps HR make the most of its limited resources.

Measuring all 26 of these HR KPIs is essential for managing and improving the HR department’s operations. When used properly, they help HR managers make more informed, data-driven decisions that ultimately benefit the company’s performance.

Regularly monitoring and understanding these KPIs allows HR professionals and upper management to make educated decisions, align their staff with strategic goals, and enhance HR procedures. HR departments can gain a strategic advantage through better decision-making when they can access and evaluate the vast amounts of HR data available through Business Intelligence tools like Power BI and Tableau.

Role of a human resources management system in measuring HR KPIs

A Human Resources Management System (HRMS) is an indispensable tool for tracking key HR metrics. Companies developed these programs to simplify and speed up HR operations, especially data collecting and analysis. HR managers use an HRMS to access and evaluate data linked to human resources metrics and KPIs, which further optimizes HR procedures.

A major perk for HR managers measuring human resources KPIs is an HRMS’s ability to collect and analyze data in real-time. Real-time data collection allows for the prompt resolution of problems. Consequently, this can boost the overall effectiveness of HR operations within a firm.

Furthermore, an HRMS can simplify the management of key performance indicators (KPIs). An HRMS can automate the process of gathering and evaluating data from various sources, saving HR managers time and lowering the likelihood of human errors.

Finally, human resource managers can use an HRMS to compile and distribute performance reports to upper management and other interested parties.

How can Brickclay help?

Transforming HR with business intelligence

Brickclay’s Business Intelligence solutions offer organizations the means to transform their HR departments into data-driven powerhouses. Our data integration and visualization solutions provide actionable insights from the top 26 HR KPIs. HR professionals and upper management can use these insights to better connect workforce plans with business goals and improve HR efficiency.

Real-time data for a competitive edge

The ability to track data in real-time and make educated decisions gives businesses a distinct edge in their markets. While each organization may have unique KPIs, our adaptable solutions ensure that we tailor these KPIs to align with your specific strategic objectives.

Driving success through data-centric decisions

With Brickclay’s assistance, organizations can make smarter HR decisions, cultivate an engaged and productive workforce, and drive success in today’s data-centric business landscape. Contact us if you want to learn more about how our Business Intelligence solutions can improve your HR strategies and boost your company’s success.